Slowdown in health-care spending may persist for some time: study

By Russ Britt

It wasn’t just a weak economy that slowed medical inflation to what the rest of the economy usually sees, and that slowdown may persist for an indefinite period, according to a study in the latest issue of Health Affairs magazine.

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Authored by a group of students, researchers and instructors at Harvard Medical School, the study says the fact that more costs have been shifted to patients could help keep a lid on health-care price hikes at roughly 3%, less than half the average medical inflation rate of 7.4% for the years 1980-2009. Medical inflation dropped as the recession hit in 2009 and has stayed down, except for a brief uptick in early 2011.

“Our findings suggest cautious optimism that the slowdown in the growth of health spending may persist — a change that, if borne out, could have a major impact on U.S. health spending projections and fiscal challenges facing the country,” the article says.

While more out-of-pocket payments from patients played a role, a slowdown in spending was present even in plans where the employee contribution didn’t increase, the study says.

Medical inflation is considered by many to be the linchpin for the nation’s troubles in managing health care. “Bending the cost curve” has been the aim of many health-care reformers. While President Obama’s health-care overhaul takes some limited measures in trying to bring down costs, it is geared primarily toward getting more people insured.

Still, a number of measures are being enacted privately in an effort to control medical inflation — including getting more doctors to affiliate themselves with hospitals and work out of them, automating health data and patient records and an initiative by some insurers to simply renegotiate lower rates.

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